Shares of Molina Healthcare, Inc. (NYSE:MOH) tumbled roughly 28% in U.S. premarket trading on Friday after the insurer reported a surprise loss in the fourth quarter and issued 2026 guidance that fell well short of market expectations.
The managed care group posted an adjusted loss of $2.75 per share for the fourth quarter, sharply missing analyst forecasts for a profit of $0.34 per share. Revenue totaled $11.38 billion, beating the consensus estimate of $10.88 billion and marking an 8.3% year-on-year increase from $10.5 billion in the same period last year.
Quarterly performance was hit by around $2.00 per share in unfavorable retroactive premium adjustments tied to Molina’s California Medicaid business, alongside continued medical cost pressures across its Medicare and Marketplace operations. The company’s medical care ratio worsened to 94.6% in the quarter, up from 90.2% a year earlier.
“We remain confident in our durable and sustaining operating platform,” said Joseph Zubretsky, President and Chief Executive Officer. “We believe that the imbalance between rates and trend marks 2026 as a trough year for Medicaid industry margins.”
Looking ahead, Molina’s full-year 2026 outlook disappointed investors. The company projected adjusted earnings of at least $5.00 per share, far below the analyst consensus of $13.71. Revenue is expected to reach at least $44.5 billion, also underwhelming compared with expectations of $46.785 billion.
Management said the 2026 guidance reflects headwinds of about $2.50 per share, including $1.50 per share linked to the rollout of a new Florida CMS Medicaid contract and $1.00 per share from weaker performance in traditional Medicare Advantage Part D products, which Molina plans to exit in 2027.
Following the update, Bank of America analyst Kevin Fischbeck reaffirmed an Underperform rating on the stock and lowered his price target to $145 from $155, citing “low visibility into risk pool shifts in Medicaid/exchanges.”
Molina also expects premium revenue in 2026 to decline by around 2% from 2025 levels, with planned cutbacks in the Marketplace business partly offset by contributions from the new Florida contract and higher Medicare premiums.